July 24 (Reuters) - Masha Lipman, one of the great chroniclers of Russian politics, told a story at a conference I attended outside of Moscow earlier this week. It was about two scholars who, in a recent discussion about the history of Russia and the Soviet Union, fell into a savage argument. One saw the end of the Soviet Union as a tragedy, the other as a release from tyranny. So radical and bitter was the disagreement that they came to blows, an unheard of event in the generally decorous world of Russian academia.

Lipman also noted that, in a discussion in the Duma (parliament), several deputies called for the abolition of the country's Independence Day on June 12, established in 1990. One suggested moving the date to whenever National Day took place in the 10th century, when "Rus" was first formed in Kiev, now the capital of Ukraine. This was a none too subtle way of saying that Russia was once a Slavic empire, and could be again.

Russia's President, Vladimir Putin, might agree with the deputies. It would be surprising if he did not. He is, after all, the same man who said in 2005 that the end of the Soviet Union was the greatest geopolitical tragedy of the 20th century.

Putin and the Russians have Russia, of course, which for the first time since the collapse of the Soviet Union in 1991 is a state that has defined borders, an elected president and parliament, and a democratic constitution that offers a swathe of citizens' rights.

But, several Russians said to me at the conference, what is Russia, after all? Why should its political connection be severed from states that it once dominated like Ukraine, Belarus, Georgia, Armenia and Central Asia? And above all, the old question: "Kuda Rossiya?" Where is Russia going? To what does it aspire? Where does it want to come to rest?

It isn't at rest now. It's been restless since tens of thousands of demonstrators turned out on the streets to protest falsified elections, corruption and much else in 2011 and 2012, and has remained so even after the re-election of Putin last year as president.

The foreign policy analyst Dmitri Trenin told me that the country's foreign policy stance has changed fundamentally for the fourth time while Putin has been on the scene in Russia.

In 2000 it started with a policy open to closer relations with the U.S. and Europe, then changed to a resentful retreat into a Eurasian redoubt when it felt repelled by the West, changed again to an attempt to reset relations when Dmitry Medvedev was allowed by Putin to be president for one term, then finally back again to Eurasia on Putin's return.

But where does that take it? There's no prospect of a re-integration of any of the former parts of the Soviet Union. Russia would demand to be first among un-equals, which the new elites of all of these states, even the closest to Russia like Belarus, couldn't tolerate.

To be sure, Russian tanks brought Georgia to heel in 2008 when it tried to take back its regions of Abkhazia and South Ossetia, which prefer rule from Moscow to that of Tbilisi. But even under a new, more Russia-friendly president in Bidzina Ivanishvili, Georgia isn't about to either give up its claim on these regions or go back to its years of dependence. A stony dislike of the West has its satisfactions for Putin, who seems to enjoy being disliked. But if he renounces Europe he has no other welcoming place to go.

It's at home though where the real confusion is. A sentence of five years was passed last week on the lawyer and opposition leader Alexei Navalny on a charge of embezzlement, a charge that his defense was not allowed to properly contest, and which was instantly followed by the prosecution requesting that he be allowed to remain free pending an appeal. That allows him to contest the election for Moscow mayor in September, which he had long intended to do. That the prosecution should be so fervent that he remain in the public eye suggests a Kremlin that regrets its actions against its most prominent opponent, because it endangered the appearance of an open electoral battle between the current mayor and Navalny. In Putin's political constructs, appearances are all.

Putin has had great, long-running success in his domination of Russia. He brought most Russians relief from poverty as rising oil and gas prices filled coffers and allowed wages, pensions and welfare payments to be made in full and on time. He ground down the hated Chechens in a brutal war early in his first presidency, and installed a thuggish president who has proven both loyal and successfully repressive. He paid apparently sincere homage to a past Soviet time, and asserted a neo-liberal fiscal conservatism in the economy, which he put in the hands of liberals. He presided over a huge expansion of the middle class but also over a machine for corrupt enrichment that has, it's estimated, made him and a number of his close allies into billionaires. He allowed some opposition papers and magazines and a lively and often highly critical Internet and cracked down hard on people like the Pussy Riot group and Alexei Navalny.

He has yoked together opposites and sought to give Russian society a unity. The party he formed in his support is called United Russia. For most of the past 13 years, it has worked. But now, Russia, at least its cities and especially its capital, is entering the modern and even post-modern world, and its society is splintering into diverse shards, as free societies tend to do.

It needs an administration that eschews the search for a fake unity, but instead seeks support from varied groups for good governance. It needs more space for a genuinely independent civil society, in which institutions have autonomy recognized and protected, by a state that does not attempt to quash them. This is where Russia must go: towards democracy. It's the only way that holds the promise of clean government, and empowers men and women in power to serve others rather than enrich themselves. There are people - politicians, officials, professionals - who wish to do that. Time they were honored, not imprisoned.

(John Lloyd co-founded the Reuters Institute for the Study of Journalism at the University of Oxford, where he is Director of Journalism. Lloyd has written several books, including "What the Media Are Doing to Our Politics" (2004). He is also a contributing editor at FT and the founder of FT Magazine.)

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of the Thomson Reuters Foundation. For more information see our Acceptable Use Policy.